"Within minutes [of the earthquake] we heard a roar," he said.
"We looked out behind us and saw a wall of white coming at us."
Mr Hallett said the wave picked up one boat and pitched it towards theirs, which burst into flames and exploded.
"I ordered everyone onto the top deck. We threw anything that floated into the water … and jumped in."
Mr Hallett said there were nine Australians, one American and four Indonesian crew onboard when the wave hit.
"We were carried up to 200m inland, fortunately most of us had something to hold on to and managed to avoid trees."
Mr Hallett said they scrambled up trees where they stayed for an hour and a half as the sea heaved.
"It was basically a head count trying to locate everyone."
He said amazingly no one on his boat was lost, but he saw a lot of debris, possibly from a resort on Pagai Island.

The undersea quake hit Indonesia's Kepulauan Mentawai region at 9.42pm (1.45am AEDT) at a shallow depth of 14.2km, the US Geological Survey said.
The area is 245km west of Bengkulu on Sumatra island and 280km south of Padang — an area popular with tourists.

Residents reported shaking as far away as the West Sumatran provincial capital of Padang, according to an AFP reporter, but fears of widespread damage eased a few hours after the quake.
"There was shaking that went on for about three seconds or so. Residents panicked and ran to the hills but now they are starting to come down. There's no report of casualties or damage," Disaster Management Agency spokesman Priyadi Kardono told AFP.

The power and shallow depth of the earthquake prompted the US-based Pacific Tsunami Warning Center to issue a "tsunami watch" bulletin to guide local authorities on how to respond but that was later cancelled.